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5.45 p.m.

Lord Carter moved Amendment No. 80:

After Clause 34, insert the following new clause:

("Agricultural Holdings Act 1986: Rights to apply for new tenancy, and good husbandry responsibilities

.—(1) The Agricultural Holdings Act 1986 shall be amended as follows.
(2) In section 36(3) (a), after the word "agricultural", where it first appears, there shall be inserted the words ", or any related ancillary,".

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(3) In paragraph 9(2) of Schedule 3, for the words ("in pursuance of any provision of the contract of tenancy, or of any other agreement with the landlord, which indicates (in whatever terms)" there shall be substituted "in pursuance of any obligation imposed upon the tenant under any scheme for the protection or conservation of the environment whether under the national law or the law of the European Union where the scheme in question indicates".
(4) In paragraph 9(2) of Schedule 3, at the end there shall be added—
"(d) the set-aside of agricultural land.".").

The noble Lord said: In moving the above amendment, I have the first chance to accept the kind words of my noble friend Lord Gallacher, who compared me to a fax machine. If my noble friend means that the fax is quick, correct, thoroughly modern and of immense value to everyone who uses it, then I shall be entirely happy to accept the analogy.

The above is not the only amendment by which we shall be attempting to use the Bill to make some improvements to the Agricultural Holdings Act 1986. In fact, I made mention of that on Second Reading. Although the Government—and, indeed, a number of noble Lords opposite—have said that they wish to draw a line under the 1986 Act, I believe we can all agree that it will be around for some time yet. Many tenancies will be affected by it; for example, there are succession tenancies which will continue for some time. A number of practitioners have drawn our attention to deficiencies in the 1986 Act. The Government now have a chance to make such amendments by using the Bill to do so. I believe that that would be making good use of the legislation.

Therefore, we have drafted the proposed new clause, subsection (2) of which states that,

    "after the word 'agricultural', where it first appears, there shall be inserted the words ',or any related ancillary'".

The purpose behind that subsection is that it is often difficult for successors to satisfy the principal source of livelihood test; namely, that the person concerned must have earned his principal source of livelihood from his agricultural work in five out of the past seven years. We know that successors usually do not succeed to holdings until they are in their 30s or 40s, by which time many will have families of their own, and agriculture has not been able to sustain the livelihood of two families. Thus, the close relatives—for example, sons or daughters—who would otherwise be fully eligible to succeed and who intend to farm have to supplement their incomes. That can take a variety of forms but it is usually agricultural or related to agriculture. Indeed, the one that we are all familiar with is contract farming for someone else or, perhaps, carrying out some haulage in the agricultural sector and similar activities.

We feel that the 1986 Act should be amended to reflect the reality of the situation and to ensure that those who are suitable and have succession rights can actually realise them. We would regard that as an improvement in the Act as it stands.

Subsection (3) of the amendment deals with environmental matters. Paragraphs 9(2) and 10(1) (d) of Schedule 3 to the 1986 Act make provision for conservation covenants to protect tenants from the consequences of a breach of the rules of good husbandry. However, the landlord must agree to the

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covenant either in the tenancy agreement or in a separate written agreement. We feel that tenants should not face such harsh consequences for inadvertent breaches of the rules of good husbandry simply because they have entered into set-aside. I think I am referring to the wrong subsection here. I am talking about subsection (4) which deals with set-aside. The rules of good husbandry are outdated and inconsistent with modern farming methods and in particular with environmental schemes. The rules of good husbandry, the covenants and set-aside are covered in subsection (4).

Subsection (3) also deals with conservation management, set-aside and environmentally sensitive areas. The management agreements which are reached under ESAs could in certain circumstances also fall foul of the rules of good husbandry which are set out in Section 11 of the Agriculture Act 1947. The rules provide that a tenant must maintain a reasonable standard of efficient production as respects the kind, quantity and quality of produce, and must maintain the agricultural unit in a condition to enable such a standard to be maintained in the future. No allowance is made in the rules for conservation management. However, a breach of the rules can give rise to an incontestable notice to quit under Case C of Schedule 3 to the 1986 Act, and also notice to remedy, which can be followed by notice to quit under Case D.

We feel that these proposed subsections are improvements. Perhaps the wording is not absolutely exact and correct but it is an improvement to the existing Act and would affect and help a number of people who will still be bound by the 1986 Act. I should tell the Minister that we shall be making a number of attempts to alter the situation. There is a later amendment down for Committee stage, and another at Report, which seek to use this Bill to achieve improvements to the 1986 Agricultural Holdings Act. I beg to move.

Lord Middleton: I understand what the noble Lord, Lord Carter, is trying to do. I am slightly worried both as regards the proposed subsection (2) and subsection (3) of the amendment. As the noble Lord, Lord Carter, has explained, Section 36 of the 1986 Act lays down the criteria for eligibility of a person who wants to take a succession tenancy on the death or retirement of a relative. Section 36(3) (a) in that Act, as the noble Lord, Lord Carter, has explained, lays down that the person who wants the succession must have worked for at least five years in farming on the holding. The wording is that his livelihood must be,

    "derived from his agricultural work on the holding".

The noble Lord wants to insert—if I understood him correctly—after the word "agricultural" that his livelihood must now be derived,

    "from his agricultural or any related ancillary work".

I am slightly worried that that widens the position. It is quite right that a landlord wants to have a tenant who has had at least five years experience of farming.

I suppose one could have a claimant for succession who has spent five years sitting behind a counter in a farm shop. I am not sure that that would be acceptable. Therefore I do have that worry as regards the proposed subsection (2) of the amendment. As the noble Lord has

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explained, the proposed subsection (3) of the amendment refers to paragraph 9 of Schedule 3 to the 1986 Act, and relates to the matters which can be ignored when there is an application for a certificate of bad husbandry. As the noble Lord has explained, where there has been a landlord's consent to carry out practices for the conservation of flora, fauna, buildings or general amenities, those practices can be ignored in assessing whether or not there is bad husbandry.

I believe that the proposed subsection (3) in the amendment has the effect of taking out this element of landlord's consent. I think that consent is necessary, for instance in a case where a tenant wants to take part in a countryside stewardship scheme which, however laudable, might have some effect on the holding. The landlord would certainly like to know about that and would like to be able to give consent, or not give consent, according to the merits of the particular scheme. I shall now describe an extreme case. Under the amendment a tenant could, without the landlord's consent, put down an entire farm to trees to obtain some grant from the European Community. I believe that would create difficulties. I have those worries.

Lord Carter: Before the Minister replies, I should say that I am not sure that on that final point the noble Lord, Lord Middleton, is quite correct, because the wording in the amendment states:

    "in pursuance of any obligation imposed upon the tenant".

It is not a matter of anything that is done at the tenant's behest; it is an obligation imposed upon the tenant. The obvious example here is set-aside.

Lord Hylton: I wish to support what the noble Lord, Lord Middleton, said about the proposed subsection (2) in this amendment and the way in which it widens the section about livelihood in the 1986 Act. I believe it could widen it in ways that would be completely opposed to the interests of good estate management. I hope that the Government will resist it, at least on those grounds.

Lord Middleton: I wish to take up the point made by the noble Lord, Lord Carter. The amendment seeks to cut out the words in paragraph 9 of Schedule 3 to the 1986 Act, which state:

    "in pursuance of any provision of the contract of tenancy, or of any other agreement with the landlord".

Those words would be cut out. That is what worries me.

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